2010 Supreme(SC) 477

Supreme Court of India
THE HONOURABLE MR. JUSTICE P. SATHASIVAM & THE HONOURABLE MR. JUSTICE J.M. PANCHAL
M/s. Speedline Agencies
Versus
M/s. T. Stanes & Co. Ltd.
CIVIL APPEAL NO.4481 OF 2010 (Arising out of S.L.P. (Civil) No.29478 of 2009)
Decided on : 14-05-2010

Headnote:(a) Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 – Sections 10(3)(a)(i) and (iii) r/w Sections 391 to 394, Companies Act, 1956 – Amalgamation – Effect of – On tenanted company and landlord company – Amalgamating company loses its identity – If tenant company merges or amalgamates with another company without consent of landlord, it would lose tenancy rights and tenancy would be forfeited – Landlord company merging or amalgamating with another company – No forfeiture of any right of landlord company – For landlord company cause of action for eviction petition has no relation with amalgamation – Rights of landlord are to be determined as on the date of the application for eviction – Amalgamation of landlord company an event subsequent to order of eviction – Amalgamation of landlord company with respondent company involved not merely the transfer of the particular leasehold property but the entire business of the landlord including the requirement of the leasehold premises for the acquired business – Had the revision petition been decided before amalgamation this contention would not have arisen at all. (Para 14, 15, 16)

       (1986) 2 SCC 656; (2004) 7 SCC 1 – Relied upon

       (1981) 3 SCC 103; 1990 (Supp) SCC 675; (2004) 9 SCC 438 – Distinguished

       (b) Companies Act, 1956 – Sections 391 to 394 – A company dissolving due to amalgamation – Its rights under decree of eviction shall devolve on the amalgamated company. (Para 18)

       (c) Administration of Justice – Subsequent events – Are not matters of automatic cognizance by Supreme Court or a mandate on the courts below – A subsequent event may be taken into account in certain circumstances and not in certain other cases – Instantly, amalgamation of landlord company subsequent to order of eviction does not have any effect on the order – In matters governed by the Rent Acts taking into account subsequent events would inflict hardship to landlords – Appeal being continuation of original suit, subsequent events could be considered in appeal, but not in revision. (Para 17, 22, 23)

       (2004) 5 SCC 772; (2008) 1 SCC 330; (2001) 2 SCC 604; (1973) 1 SCC 688; AIR 1941 F.C. 5 – Relied upon

       (d) Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 – Expression "for its own use/occupation" – Has to be construed widely – For “its own use” would include amalgamation fir expanding business – The Companies Act and the Rent Control Act have to be interpreted harmoniously – Entire business of the transferor company stands transferred to the transferee company – Hence requirement of premises by transferor company continues to exist also for the transferee company. (Para 27, 28)

       (e) Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 – Section 10 r/w Order XXI, rule 16, Code of Civil Procedure, 1908 – Eviction – Instantly order of eviction crystallizing transferor company’s right of evicting tenant company – Amalgamation order preserving that right. (Para 28, 29, 30)

       (f) Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 – Section 10(3)(iii), Proviso – Plea based on section 10(3) being a new plea raised for the first time before Supreme Court, not tenable – Even otherwise, not applicable to pending revision – Further, pleading only stating that amalgamated company owns other land not that it occupies the same – Provision not attracted. (Para 32)

       Facts of the case:

       The appellant took the suit premises comprising an area of 1.4 acres, i.e., 61,872 sq. ft. with a building having built up area of 5,274 sq. ft. on lease under lease deed dated 17.11.1965 for use as residence-cum-office from M/s United Coffee Supply Co. Ltd., for a period of five years on a monthly rental of Rs.400/-. On the expiry of the period, the lease was further renewed for a period of five years under lease deed dated 01.10.1970. On failure to renew the lease from 01.10.1975, the appellant instituted a suit in O.S. No. 209 of 1976 for specific performance of the renewal clause in the lease agreement dated 1.10.1970. In the said suit, a settlement dated 12.04.1978 was arrived at whereby the appellant agreed to pay fair rent of Rs.1200/- w.e.f. 1.10.1975.

       In 1984, the landlord-company filed rent control petition claiming monthly rental of Rs. 9500/- retrospectively from 01.10.1980. However, the Rent Controller, by order dated 18.10.1994, fixed the fair rent as Rs.6465/-from 1.10.1980. The appellant filed R.C. Appeal whereunder the rent was fixed as Rs.7852/- on 19.12.2001 which is currently being paid.

       On 15.09.1985, the name of the landlord-company, M/s United Coffee Supply Co. Ltd. was changed to Stanes Tea and Coffee Ltd and it filed RCO Petition on 03.04.1987 under Sections 10(3)(a)(i) and (iii) of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 on the ground that it required the building and premises for their own use and occupation etc. The Rent Controller allowed the petition and directed eviction of the appellant. The appeal against this order was dismissed. Against the said order, the appellant filed revision petition before the High Court.

       During the pendency of the said C.R.P. before the High Court, by a Scheme of Amalgamation, M/s Stanes Tea and Coffee Limited was transferred to M/s T. Stanes & Company Ltd., under Sections 391 to 394 of the Companies Act, 1956 and this was duly approved by the High Court. Application for amendment of the cause title was also allowed by the High Court.

       The High Court dismissed the revision filed by the appellant herein.

       Finding of the Court:

       The landlord’s entitlement to evict the tenant had merged with the decree. Further, the amalgamation took place long after the decree for eviction and rights had crystallized under the decree for eviction and merged into it. Order of eviction is eminently just, fair and equitable as ordered by two authorities and confirmed by the High Court

       

       Result:

       Appeal dismissed.